WEDNESDAY, 11.00AM:
NEW laws cracking down on insider trading may be tabled in Parliament within six months, following Tuesday’s release of the King commission report into insider trading.
A preliminary draft of the report was circulated in May, although the final report contains some notable differneces. Bith reports propose a new insider trading Act embracing trades in equities, derivatives and bonds. Current legislation, in terms of which there has never been a prosecution, only regulates equity trades.
The final report contains three notable differneces from the May draft: A raised burden of proof — the draft provides that prosecutors need only prove that an accused “ought reasonably to have known” that trades were based on inside information. The final report requires that an accused actually knew. Only individuals are liable to criminal prosecution, but corporation will be civilly liable. Insider trading was previously defined as a trade based on “price-sensitive information. This was changed to “inside” information. It is hoped the new proposals will bring SA insider trading laws into line with international standards.